WT Business Beat

By Nick Wakeman

Oracle's JEDI protest denied

The Government Accountability Office has handed Oracle a defeat in the company's quest to push the Defense Department away from its single-award strategy for the $10 billion JEDI cloud contract.

GAO denied Oracle’s protest and said that a single award strategy did not violate federal laws and procurement regulations -- one of Oracle’s key arguments.

“The Defense Department’s decision to pursue a single-award approach to obtain these cloud services is consistent with applicable statutes (and regulations) because the agency reasonably determined that a single-award approach is in the government’s best interests for various reasons, including national security concerns, as the statute allows,” GAO said in a statement announcing its ruling.

GAO's decision is not available yet as the agency generally allows protesters and the government to haggle over a public version of the decision.

GAO rejected Oracle’s contentions that DOD restricted competition by writing a solicitation with requirements that exceeded its needs. Oracle also lost the argument that DOD failed to consider potential conflicts of interest.

GAO said DOD provided justification for all of its requirements and that those potential conflicts of interest are not a basis for ruling in Oracle’s favor.

DOD appears to have cleared this hurdle but a protest is still pending involving a filing by IBM Corp.

Because of the gap in filing dates, GAO couldn’t adjudicate them concurrently. IBM’s decision is due by Jan. 18.

It is unclear how the Oracle decision will impact IBM’s protest. Both have argued that the single-award strategy is wrong but it does appear IBM has a high hurdle to clear in order to prevail. Something we predicted long before any protests were filed.

I’ve reached out to Oracle and IBM for comment and will update this blog if I hear back.

Oracle has the option to take its arguments to the U.S. Court of Federal Claims. It also still has the right to file a protest at GAO after DOD makes an award for JEDI. However, it seems unlikely that Oracle will be able to re-litigate its just denied protest. A post-award protest would have to raise new objections.

The JEDI cloud contract has been controversial in many corners of the government IT space primarily because of DOD’s insistence that it be a single-award contract. Opponents argue that a single award would deny DOD access to innovation and it is an approach that runs contrary to commercial best practices.

Many have argued as well that JEDI is designed to favor Amazon Web Services.

Bidders for JEDI include AWS, Microsoft, IBM and Oracle. DOD is expected to make an award by April.